Nvidia, Apple and Microsoft claim $4 trillion capitalization

Just ten days ago Manzana It was the worst-performing company in the stock market among the six large American technology companies. However, after revealing its strategy in artificial intelligence generatively on June 10 he starred in a rally carrsátile, which brought it to first place in the ranking by capitalization. The company that just days earlier saw Nvidia surpass it in market value has once again found itself the queen of the stock market, hours ahead Microsoft. This Tuesday the processor manufacturer NVIDIA makes history again positioning itself as the most valuable technology.

The rise of Apple, which added $260 billion to its stock market value last week, and Nvidia’s meteoric rise last year illustrate the scale of economic growth. investor enthusiasm around AI.

This collective fervor, reminiscent of past bubbles, will propel better-positioned tech stocks higher. Optimism has some analysts predicting a race between Nvidia, Apple and Microsoft to reach a $4 trillion market cap.

“They will be the main characters next yearrace to $4 trillion capitalization tech sector,” says Dan Ives, an analyst at Webdush, who believes that “the AI ​​party has just begun,” which is why he argues that we’ll see an upward cycle in the tech sector this year and 2025. This analyst equates this point to 1995. “with a wave of transformative technology spending not seen since the advent of the Internet,” he says.

This boom is over a bubble that burst. “This is not a bubble, but the beginning of the fourth industrial revolution,” defends Ives. While he acknowledges that there will be “periods of digestion of technological values”, he emphasizes that in the coming years we will face a “trillion-dollar-plus market opportunity” for the sector.

These giants are the only technology companies with market capitalizations exceeding three trillion dollars. Nvidia leads with a capitalization of $3.34 trillion; Microsoft follows closely behind at $3.32 billion. Apple, for its part, is capitalized at $3.29 billion.

Nvidia

Nvidia processor group, the company that makes the most money from AI, is a big Wall Street star. In just a year, the company more than tripled its market value, adding more than two billion in capitalization.

The AI ​​explosion has catapulted Nvidia. Its graphics chips, optimized for processing large amounts of data, are essential for training and executing the language models needed by artificial intelligence. Company h.quadruple quarterly income (to $26 billion) and multiplied its profits 22 times (to $14,881 million) in the year and a half since ChatGPT launched the generative AI race.

Group led by Jensen Huang leads the market chips for AI, with a share of more than 80%. Given this dominant position, this company is best positioned to take advantage of the high demand expected for these processors.

Ives equates Nvidia’s chips to the tech industry’s “new gold or oil” due to the huge need for these GPUs over the next few years to build out the infrastructure to support artificial intelligence.

Juan thinks we’re on the brink “fourth industrial revolution” based on artificial intelligence. A wave of innovation that requires significant investment in updating and expanding the infrastructure of data centers, which will become so-called “artificial intelligence factories.” In his opinion, about one trillion dollars will be invested in the creation of this global infrastructure in the next four to five years.

Nvidia is committed to maintaining its first-mover advantage and has announced that it will release a new accelerator chip every year. BlackBell is coming later this year. In 2026, it will be Rubin’s turn.

The big question is how long this AI investment cycle will last. In the short term, Nvidia sees no dark clouds on the horizon despite increasing competence chip manufacturers (AMD and Intel) and large technology companies such as Amazon, Google, Microsoft, which produce their own chips.

UBS forecasts strong demand which will lead to… Revenue this fiscal year will be about $175 billion., up 45%, with earnings per share of $41. If so, Nvidia could more than double the all-time sales record of Intel, the historic chipmaker. It is unknown how long this explosion will last and at what point Nvidia will be affected by the cyclical waves of demand in the chip industry.

Manzana

Apple entered the race after unveiling its artificial intelligence strategy on June 10, based on features built on its own technology (Apple Intelligence), improving the capabilities of your conversational assistant Siri and integration ChatGPT by OpenAIto which other models will be added in the future.

As Francisco Geronimo, an IDC analyst, explains, Apple was forced to take this step because it was faced with “a disruptive technology that is potentially harmful to its business and future.” This expert believes that the company has deployed reliable strategy, laying the groundwork for Siri to become “a true digital assistant that understands context and can respond to user needs in natural language.” As such, he believes the updated Siri “will be a game changer and will give many users a compelling reason to update their iPhone in the coming years.”

This is the great unknown. Will there be generative AI? sales booster this opens up a new supercycle for the iPhone. Can Apple achieve the same success with AI as its recent stock rally suggests? At the moment, there is no consensus among analysts.

There will be no impact on business in the short term. Firstly, because the features will take time to arrive and will initially only be in English, while competitors such as Samsung and Google on mobile phones or Microsoft on PCs have already deployed artificial intelligence capabilities. Apple Intelligence features will be released in trial mode this fall in new operating systems. Integration with ChatGPT will not happen until the end of the year. And Siri’s more advanced app control capabilities won’t be ready until 2025.

“He Apple’s announcement was a bit disappointing“says UBS, whose analysts believe Apple’s AI strategy “will not lead to a significant upgrade cycle this fall” with the iPhone 16, contrary to what JPMorgan and Morgan Stanley think. UBS sets price. $190 per share due to “challenging growth conditions” and “poorly defined AI strategy“.

On the contrary, Wedbush is optimistic. Thus, he views AI as a “catalyst” sales supercycle because, he notes, at least 270 million iPhone users have not upgraded their terminals in the last four years. He also expects the company to monetize more advanced features through subscriptions in the future, which will be another growth engine for services, Apple’s second-largest business.

Microsoft

The Satya Nadella-led group has quickly embraced artificial intelligence and is one of the tech companies best positioned to benefit from this wave of innovation thanks to its strong position in cloud services and business technology.

Ives believes that AI is to Microsoft what the iPhone was to Apple. The company predicts that over the next three years, more than 70% of Microsoft’s installed base will use the company’s artificial intelligence offerings. He believes FY25, which begins July 1 next year, will mark a “turning point” in this upward trajectory.

Deployment Second pilot (Microsoft’s artificial intelligence technology, which is already used by 60% of Fortune 500 companies) could generate $25 billion in revenue for the company next year. In addition, artificial intelligence will lead to a sharp increase in demand for clouds. “For every 100 dollars Azure costs (Microsoft public cloud) in recent years, the incremental cost of AI in the future will be $40,” he explains. In its latest results, the company noted that AI demand drove Azure’s growth by seven percentage points to 31%.

Meanwhile, Microsoft, like the rest of the big tech companies, is launching capital investments support this ambitious AI strategy due to the high data center and chip demands this wave of innovation requires.